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Puerto Rico Teaches OppenheimerFunds Perils of Hunting for Yield

  • Ten of 20 muni funds hold at least 15% stakes in island debt
  • Nine of those are in bottom 10 percentile versus peers in 2015
Updated on

Puerto Rico had a strategy over the past decade to paper over its deficits: Issue billions of dollars worth of tax-free municipal bonds.

OppenheimerFunds Inc. had a strategy over the same period to deliver outsized returns to its muni mutual-fund shareholders: Buy billions of dollars worth of the commonwealth’s high-yielding debt.